Stagecoach on track to hit targets after strong U.S. growth

LONDON, Aug 29 (Reuters) - Transport group Stagecoach said strong growth at its British rail businesses and North American bus operations put it on track to hit financial targets this year.

The company said on Thursday its UK rail business reported a 6.5 percent rise in sales in the twelve weeks to July 21, while Virgin Rail, which Stagecoach operates with Richard Branson’s Virgin Group, delivered a 5.8 percent sales rise.

Its North American bus business, which includes yellow school bus services and Megabus, grew sales by 5.7 percent in the twelve weeks to July 31, helped by the recent launch of its Texas and California networks.

Stagecoach said Megabus was now the fastest-growing part of the group, increasing revenue by 21.8 percent in the three month period, and that its North American business would likely deliver “a significant step up” in 2013/14 operating profit.

Its British regional bus division reported a 4.5 percent uplift in underlying sales, while its London bus business posted a slight dip in revenues, which it expects to reverse in the second half.

The company said the overall profitability of the group had remained good and there has been no significant change to its profit expectations for the year to the end of April.